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TFI PZU – activities on the investment fund market

The operations on the investment fund market in scope of PZU Group are carried out by Towarzystwo Funduszy Inwestycyjnych PZU SA (TFI PZU). It offers products and services to both mass market and institutional customers, including additional investment/ savings programmes within pillar III of the social insurance system, including Individual Pension Account (IKE), Specialized investment programmes, Employee Pension Programmes (EPP) and Corporate Investment Programmes (ZPI)

Situation on the market

After a good result in 2013, which saw the assets managed by domestic funds grow by almost +29.6%, the 2014 asset dynamics were three times lower and ultimately amounted to +10.6%. At the end of 2014, the assets for the entire investment fund market amounted to over PLN 209 billion in comparison to almost PLN 189 billion in December of 2013.

The slowdown of the market development dynamics is rooted mainly in the reduced popularity of funds among the clients. In 2014, the balance of sales of the products offered by domestic TFIs amounted to PLN 11.5 billion compared to PLN 21.5 billion in 2013. The lower sales balance results mainly from the reduced interest in non-retail funds oriented towards a narrow target group.

Additionally, the low results of the managers and the changed preferences of the clients also contributed to the 2014 reduction of asset growth. In 2014, the most popular products among domestic investors were those with a low risk profile – cash, monetary, and debt-based.

The structure of assets changed on the Polish investment fund market because of the trends described earlier. The biggest growth dynamics were recorded by security funds, monetary market funds, debt funds, and raw material funds.

Activities of TFI PZU

The operations on the investment fund market in scope of PZU Group are carried out by Towarzystwo Funduszy Inwestycyjnych PZU SA (TFI PZU). It offers products and services to both mass market and institutional customers, including additional investment/ savings programmes within pillar III of the social insurance system, including Individual Pension Account (IKE), Specialized investment programmes, Employee Pension Programmes (EPP) and Corporate Investment Programmes (ZPI).

In 2014, the balance of sales of the products offered by domestic TFIs amounted to PLN 11.5 billion compared to PLN 21.5 billion in 2013.

At the end of 2014, TFI PZU had 24 funds and sub-funds in its portfolio, of which 16 were also offered to customers from outside PZU Group.

At the end of 2014, TFI PZU accumulated net assets of a value of PLN 25 540.9 million, which means growth of 15.0% compared with the situation at the end of 2013. Similarly, it maintained the leading position on the investment funds market with a share of 12.2% (compared with 11.8% by the end of 2013 and 10.5% in December 2012).

Investment fund companies - share in net assets as at 31.12.2014 (%)

Source: Chamber of Fund and Asset Management

Simultaneously, TFI PZU remained the leader in the segment of employee pension programmes among all institutions operating on this market (not only investment funds), accumulating assets worth more than PLN 3.0 billion (compared to PLN 2.2 billion at the end of 2013 and PLN 1.8 billion in December of 2012).

Net assets value of TFI PZU (PLN million)

TFI PZU’s assets growth in 2014 was primarily due to:

  • active sales of funds and subfunds – in 2014 the external clients of TFI PZU invested almost PLN 3.1 billion gross (and almost PLN 1.7 billion net sales). Combined with the results of fund management, this allowed to increase the external client asset value in TFI PZU to over 6.0 billion PLN (41.5% more than in the previous year and 83.9% more than in December 2012). Therefore, the value of external client assets managed by TFI PZU rose 2.5 times during the last three years;
  • the registration of eight new Employee Pension Programmes and the takeover of five EPPs for management;
  • the investment results generated by the fund managers.

Rates of return on TFI PZU investment funds in 2014 (in %)

Factors, including threats and risks, which will affect the activities of investment funds in 2015

The condition and results of the investment fund market will primarily depend on:

  • operations of central banks;
  • the economic climate on capital markets (including the prices of raw materials);
  • attractiveness of traditional bank deposits and profitability of instruments.